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How can firms prove their ‘good culture’ to regulators, when the standard of proof that regulators expect is rapidly moving ahead? The first official global survey (IOSCO FR05/2019) of how financial Conduct regulators are now using “Culture measurement” to question customer outcomes was published on the 10 April 2019. More than 25 financial enforcers around the world – including of course our own FCA – are now using behavioural science to test how well financial firms treat customers. Regulators broadly agree: their new, behavioural approach is delivering sharper analytical tools that better identify real levels of customer care.
As never before, regulators now use these tools to question how far customer outcomes are “acceptable and expected” across a wide range of products, markets and jurisdictions. Regulators’ new tools include top-down Culture Audits; talking directly to front-line staff about their experiences; and Fairness Analysis of specific products. In the UK, 2019 sees Conduct rules (including SMCR) extending beyond banks to include insurers, asset managers and other providers. Any firms that persist in using a conventional Compliance approach will soon find their culture exposed to critical public scrutiny.
We have created a UK Finance interactive workshop that responds to member firms’ concerns that “The MI we have isn’t the MI we need for Culture reporting”. This continues the premise of our original, popular series of Conduct workshops: that it’s better to learn in advance what is expected of your firm, rather than wait and find your front-office staff lost for words in the face of an unexpected Culture question from an FCA case officer.
Senior lead managers for culture assessment have been asking whether their own approaches are valid and worthwhile, and whether the regulator is likely to approve them when first examined. To find out what a culture audit means for your firm in practice, you first need to know which elements of behavioural science regulators care about, then how they use them: What culture factors and indicators will you be expected to report? Where your existing MI falls short, where else do you look for it and how do you frame better audit questions of your own? How vulnerable is your firm, compared with other providers?
Join us on this interactive workshop for first sight of a range of firms’ Culture reporting designs; straight answers to common questions from culture project team leaders; an industry-wide informed view of which MI sources are most valuable, and which indicators most effective; and an update on the latest research sources that inform regulators’ thinking.
By attending this session you will:
If you have five or more delegates who wish to attend this briefing, it may be more cost effective to run it in-company. To find out more about in-company training, please contact the team on 0203 934 1014 or training@ukfinance.org.uk
Morning Session 1: How we came to be here
Lessons from Conduct and other recent culture-related enforcements
Why a report of “full compliance” is a fiction; what should replace this
The regulator’s various strategies to address the (impossible) task
Where past regulatory initiatives failed
Morning Session 2:
‘Behavioural regulation’ and key components of culture
The regulator’s latest outlook on compliance:
Afternoon Session 3:
Various members’ approaches (anonymously shown):
Reporting dashboards:
Afternoon Session 4:
Other measurement initiatives:
Registration: 09:00
Start: 09:30
Close: 17:00
Lunch will be served and there will be two 15 minute breaks (mid-morning, mid-afternoon).
* Please note that the programme sequence and/or subject matter may differ from what is presented herein; the programme is constantly being updated to embrace new ideas and developments – as they evolve.
Trainers use a blend of presentational methods in order to assist in a delegate’s understanding of the workshop content; where applicable and possible, the workshop is enhanced through the use of group exercises, role play, and case studies.
Financial practitioner turned specialist researcher in the field of regulated Conduct
Roger Miles researches human-factor risks in regulated financial sector firms and helps steer their responses to the new “behavioural regulation” of Conduct, Culture and Reputation Risk. He works directly with firms’ leadership groups and delivers visiting lectures at the universities of London (LSE; Imperial College), Cambridge, and Cranfield (UK Defence Academy). His published work includes the industry standard handbook Conduct Risk Management: A behavioural approach (Kogan Page); the Encyclopaedia of Key Concepts in the LSE’s annual Behavioral Economics Guides (behavioraleconomics.com); the Conduct and Culture video series for Finance Unlocked (financeunlocked.com); and for Thomson Reuters, more than a decade of popular commentaries on risk culture.
Working both with sector groups including UK Finance’s Academy initiative, which he co-founded, and directly with senior leaders in regulated firms, he assembles and develops improved indicator sets and reporting formats. As part of this process, he gathers and socializes best practice in measuring and reporting human-factor risk among several hundred regulated firms, typically engaging one-to-one with more than 3000 attested Senior Managers each year. He is also an invited contributor to regulatory change initiatives in the finance, technology and food sectors in the UK and internationally, as behaviour-based regulation expands across other jurisdictions, working with current programmes across the EU, USA, Australia, Japan, Singapore and South Africa.
After Oxford degrees and audit training with PwC, he advised major public companies as a partner in investor relations firm Georgeson & Co. He later led risk communication initiatives for banking advocacy groups the BBA in London and FBE Brussels, and for HM Government (Cabinet Office, Defra). He was awarded a PhD (Risk, King’s College, London) for his original, live, concurrent research into banks’ rule-gaming of regulatory capital reporting during 2006-7. In a research paper at LSE in 2010, he accurately predicted the regulatory regime change to a Conduct-based approach.
Chief Risk Officers; Conduct and Culture function leaders, programme and project managers; General Counsel, Corporate and Regulatory Affairs specialists; Human Resource and other Operational Risk managers involved with Conduct and Culture assessments; Director and other senior Risk Governance roles concerned with Conduct Risk.